You’re looking at a retailer’s most important brand touchpoint

If you work in the retail industry and haven't read the The Good Jobs Strategy, by Zeynep Ton, a business professor at M.I.T.’s Sloan School of Management, then please do. It clarifies, expounds upon, and validates principles of operations management that our Charlotte marketing agency have observed and promulgated for over a decade. 

Ton, 39, grew up in Turkey and spent several summers working at her father’s apparel factory, often sewing pockets for bathrobes. The job was, like many menial low-wage tasks, both pressure-filled and boring, and Ton wished she could find a way to make such workers happier. After a volleyball scholarship brought her to the United States as a young adult, she eventually dedicated her academic career to figuring out how to make low-paid work more rewarding for employees and employers alike.

Her central thesis is that many of big-box retailers have been making a strategic error: Even the most coldhearted, money-hungry capitalists ought to realize that increasing their work force, and paying them and treating them better, will often yield happier customers, more engaged workers and – surprisingly – larger corporate profits. This may sound naive, but a study co-authored by Marshall Fisher, a Wharton professor who specializes in retail-management studies, backs it up. For every dollar of increased wages, one retailer that was studied by Fisher brought in $10 more in revenue. For more-understaffed stores in the study, the boost was as high as $28.

Ton cogently argues that workers are not merely a cost. Store associates can be a major source of profit. A better-paid, better-trained worker, she argues, will be more eager to help customers; they’ll also be more eager to help their store sell to them. The success of Costco, Trader Joe’s, QuikTrip and Mercadona, Spain’s biggest supermarket chain, indicate, she argues, that well-paid, knowledgeable workers are not an indulgence often found in luxury boutiques with their high markups. At each of the aforementioned companies, workers are paid more than at their competitors; they are also amply staffed per shift. More employees can ask customers questions about what they want to see more of and what they don’t like, and then they are empowered to change displays or order different stock to appeal to local tastes. (In big chains, these sorts of decisions are typically made in headquarters with little or no line-staff input.) Costco pays its workers about $21 an hour; Walmart is just about $13. Yet Costco’s stock performance has beaten Walmart’s for a decade.

As shopper marketing agency, we spend a lot of time helping our clients enhance and leverage every point across the path to purchase, but more often than not, the associate engagement efforts we propose are either underfunded or overlooked entirely. Hopefully, that trend will begin to change as retailers realize the power of a friendly smile and knowledgable staff in an increasingly impersonal omnichannel universe

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